Will Dubai real estate boom reach an end?
While many market forecasters predict that the Dubai property boom is nearing an end, there are also signs that indicate a continuation in property inflation, which is good news for all property sellers… While prices are not increasing like the past couple of years, the end of Ramadan and the start of the Autumn/Winter season signal a surge in property demand once more. The Dubai property market is known for having a shortage of property in comparison to growing demands and an ever-increasing population. While the number of developments currently under construction suggest that the demand and supply for freehold and rented property will even out in 2008, and result in prices dropping, the same complications that have occurred in 2007 look to continue into the next year- construction delays.
The fact that projects have not been finished on time, some even many months behind schedule, has had a dramatic impact on the market, and has kept property prices on the rise beyond what speculators predicted. This is, however, good news for sellers. While property remains competitive with world property prices, Dubai freehold property remains a good option for both local and overseas buyers. At the same time, sellers of property can still make a healthy profit on their investment by selling through the right real estate brokers.
Forecasting into the future is difficult for the Dubai real estate market, mostly due to the fact that projected property releases are more than enough to meet the level of demand, which would lead to reduced prices over the next few months. The predicted delays will drastically lower the actual release of property and as post-summer season is often the time that the influx of new residents is high, prices are sure to inflate, at least in the short run.
There are varieties of properties that are particularly popular on the Dubai property market due to quality, location and project size, as well as an excess demand for villas in all freehold developments. Projects such as the Palm Jumeirah, Arabian Ranches, Burj Downtown and Emirates Hills are a really popular but with investors right now, and sellers of any of these properties can really make a good profit if they sell now.
High demand for property is a reflection of confidence in the future of Dubai, and newly launched mega-projects such as the Dubai International Financial Centre and the Burj Dubai. But there are two other lessons that can be drawn. First, property is being sold too cheaply. This is the same as a bargain in a local supermarket. Suddenly queues appear from nowhere, and if the sale is announced in advanced some brave souls will spend the whole night waiting for the doors to open.
In a market economy, cost will rise to match demand. And in the Dubai re-sale market the market is working, raising prices and adjusting to the ebb and flow of the buying public’s consumption.
